Greg Hinz On Politics

RTA opens new front in Kankakee sales-tax war

The Regional Transportation Authority fired a new round Wednesday in its war over alleged sales-tax dodging in Kankakee, releasing the names of 16 more companies it says have used the downstate community to avoid paying sales taxes on goods headed for Chicago.

Among those on the new list: units of Cabela's Wholesale Inc., the big sporting goods vendor; Home Shopping Network; and Williams-Sonoma Inc. Also included were computer makers Hewlett-Packard Co. and Lenvo Inc., as well as NCR Corp., U.S. Cellular and CompuCom Systems Inc.

But RTA Chief of Staff Jordan Matyas says those on today's list deprived the RTA of "millions and millions of dollars, if not hundreds of millions" by setting up "receiving offices" in Kankakee, which is just outside the six-county RTA region and has lower sales taxes. Kankakee profited by getting some sales tax revenue it otherwise would not have received, the RTA contends.

Kankakee has denied that and the issue is being litigated. But RTA officials are seeking legislation in Springfield to ban such arrangements.

RTA officials are due to testify tomorrow before the Illinois House revenue committee. So far, it says, records released under the state law indicate that at least 172 municipalities have such agreements with 501 companies, "a good percentage of them" aimed at avoiding RTA taxes, Mr. Matyas says.